IFFCO to fund major part of 500 mn for Canada urea plant

NEW DELHI: Fertiliser major IFFCO will fund a substantial chunk of USD 500 million (about 2,750 crore) investment to establish a urea plant in Canada with about 1.3 million tonnes annual capacity, a top IFFCO official said.

Last month, the fertiliser cooperative had announced that it has entered into an agreement with Canada-based agri cooperative La Coop federee to set up this plant with a total investment of USD 1.2 billion (about Rs 6,600 crore).

Out of the total investment, IFFCO's Managing Director U S Awasthi said, $700 million (about 3,850 crore) would be sourced through banks and pension funds.

"Of the remaining USD 500 million, we will invest a substantial chunk. The amount of investment to be made by the other two contributors, Quebec Investment Fund and La Coop federee is to be decided," Awasthi told PTI.

IFFCO will fund the amount through internal accruals and will look for suitable investors to fund the project, he added. "We are talking with some banks and investment funds, but it will take some time before anything is finalised," Awasthi said.

The construction of the plant, located at Becancour city in Quebec province in Canada, will commence in 2014 and the it will be fully operational in 2017. IFFCO chose the Becancour Industrial Park site due to its strategic location, access to a port and railway and the ease of supplying it with natural gas pipeline, he added.

IFFCO, which produces and markets fertilisers, operates 5 fertiliser production plants in India and holds participating interest in plants in Oman, Jordan and Senegal.

La Coop federee is the biggest agri-food enterprise in Quebec and ranks among the 100 biggest cooperatives and mutuals in the world, all sectors combined.